PA Consulting Universities should prepare now to take advantage of government coronavirus aid

Universities should prepare now to take advantage of government coronavirus aid


Institutions need to show they have made efficiencies, are strong in STEM, benefit the wider economy, and optimise organisational data so they can make a swift application

Coronavirus has knocked university finances off balance. Research projects have been delayed by the lockdown, and it is unclear just how many students – domestic and international – will start new courses in the autumn.

To help institutions cope, the UK government has announced three different types of aid.

The first is a £280 million pot to allow universities to extend UK Research & Innovation (UKRI) and national academy grants, designed to help the many projects thrown off course by the pandemic.

This money can cover researchers’ salaries, fieldwork and lab equipment. For UKRI grants, allocations will be calculated on the basis of how much a university was set to receive in the year from April and no application is currently necessary. “It appears to be a case of ‘the cheque’s in the post’,” explains Ed Jones, a higher education commercial expert at PA Consulting.

The second type of aid is more complicated, and universities need to think hard about how they pitch for assistance.

The Department of Business, Energy and Industrial Strategy (BEIS) says that from the autumn, it will distribute a mixture of low-interest loans and grants to offset up to 80 per cent of lost international student fee income during the upcoming academic year.

Universities often cross-subsidise research using these fees, and the explicit aim of the aid is to preserve research and innovation activity.

Institutions will need to show they are making “efficiencies”, according to BEIS. For example, cutting senior staff pay is not likely to make a big balance-sheet impact, but restraint is “important in terms of the government’s agenda”, says Rosie Boorne, a public sector business case expert at PA Consulting. It might help the “optics” of your bid, adds Jones.

More “meaningful” savings will come from administrative reform and shared services overhauls, which many universities have already implemented, Boorne explains.

Try to demonstrate you have cut costs before and after the pandemic hit. “Your story will be stronger if you say: I’ve done a lot already, and I’ve made these short-term impacts,” she says. 

The BEIS guidance also stresses that there will be a “particular emphasis” on assistance for “STEM research and areas of research typically funded by charities and businesses”.

“Play to the criteria that they’ve emphasised,” advises Boorne. It might not be time to stress your “credentials in medieval literature”, adds Jones.

It’s not yet clear when applications for this type of aid will open. But universities need to get their ducks in a row beforehand. “It’s likely when it does land that the deadlines may be quite short,” says Boorne.

“Start getting the data at your fingertips,” Jones advises, in order to make a strong case about lost income. When making an application, he recommends getting senior staff together to “nail the story” and hammer out an application rather than circulating drafts for “weeks on end.”

The third plank of government aid is the higher education restructuring regime, led by the Department for Education. Released in mid-July, this sets out the conditions under which the government will bail out institutions at risk of bankruptcy due to the pandemic.

“The bar is set quite high”, say Boorne. “You need to be in quite significant difficulty before you access this.”

A number of strings are attached to its emergency loan support, including an increased focus on STEM courses, possible mergers, and, controversially, curbing “niche activism and campaigns” by student unions.

The government has made it clear that it will only save those institutions that can demonstrate their economic value.

“There’s almost a complete lack of sentimentality about the institution. It’s all about student experience, quality of research, STEM,” says Jones. “It’s not about: ‘We need to preserve this august institution that has been around since the Middle Ages’.”

Universities that apply for this type of help are going to be judged “almost on a regional economic development lens”, says Boorne. As such, they need to think about the “benefits of supporting that institution to the economy”, rather than more narrowly about how aid will help their cashflow.

So far, no universities are in enough financial trouble to need such a bailout. Come the autumn, when new students enrol – or fail to – institutions will have a better idea of where they stand. But all universities should be preparing now to take advantage of government help – if and when they need it. 

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